Encouraging development difficult without incentives, broker in charge of marketing former Route 195 land tells commission

PROVIDENCE — The broker charged with marketing the former highway land now available in the capital city offered a sobering view Monday night of the prospects of development in Providence without economic...

PROVIDENCE — The broker charged with marketing the former highway land now available in the capital city offered a sobering view Monday night of the prospects of development in Providence without economic incentives during his first public presentation to the Route 195 Redevelopment District Commission.

But he expressed optimism about the number of investors who opened and clicked through the first email blast his brokerage firm, Jones Lang LaSalle, sent about the land the commission is charged with developing. Of 9,000 investors who received the email, just over 3,500 opened it and 146 clicked through it, said Travis D’Amato, the firm’s senior vice president of capital markets. That’s “a very good hit rate,” he said.

The firm’s communications program then generated a list of people to call, and the team is doing so, he said, but it’s “very, very early to determine the level of interest.”

Feedback thus far includes questions about the negative connotation in people’s minds about building in Rhode Island.

“Travis, why is this different than anything I’ve ever tried in Rhode Island before?” they ask, he told the commission.

The broker has plenty of positives to share, he said.

The extensive “toolkit” the commission developed and posted on its website provides plenty of detail, he said — so much so that he advised interested developers who read it not to attend last week’s information session with 195 Executive Director Jan A. Brodie, which drew only a handful of potential developers.

He praised the quality of Providence’s medical and educational facilities as equal to Boston’s and said there are just fewer here. The master permitting process the commission has created will allow for quick, efficient development. The infrastructure work completed — with regard to utilities, stormwater, environmental review and roads — will translate into shorter development time, he said.

He praised a grant proposal a city employee briefed the commission on Monday night as “dramatically” changing the equation. The city is seeking federal dollars to help build a streetcar in Providence, along a fixed route that runs past plenty of vacant land available for development.

Nevertheless, the “economics are tough,” he said, and feedback he’s getting centers on this question: How will developers make the math here work for construction to be worthwhile?

“With the people I’m dealing with, it comes down to dollars,” said D’Amato, who told the commission he has sold a lot of land in his career. “It doesn’t work.”

Multifamily housing projects come closest to working financially, he said, but office and other commercial projects simply don’t. Rents are about half what they are in Boston, he said.

To a question about whether the financials would work if the commission gave away the land, D’Amato replied, “I’m saying it would be very difficult.”

Another problem is taxes, D’Amato said. Not only are they high, but they’re unpredictable, particularly in a state where cities struggle with the possibility of bankruptcy, he said. He said he wouldn’t name clients, but he said some have built in suburban Rhode Island and then had their taxes double.

Don’t say the numbers don’t work, he advises. Instead, offer a plan and say it requires a 10-story parking garage, a 10-year tax deal and an additional incentive, he tells them.

After the meeting, 195 Chairman Colin P. Kane said D’Amato’s report was not surprising, but the opportunities are exciting.

“It poses a challenge. It does,” Kane said. “But our goal is to build consensus, not ram it down the city or the state’s throat, but build consensus around what the highest and best use is of this property. … Do we subsidize a luxury condominium? Maybe not. Do we subsidize a speculative research laboratory? Maybe. I don’t know the answer to those questions. Those are decisions that the commission makes.”

In other news, Brodie told the commission that the helistop on the former highway land — the only public landing spot where private helicopters could touch down in Providence — has been decommissioned by the Rhode Island Airport Corporation.